Energy regulator Ofgem has warned that it can now take direct action against ‘rogue’ brokers that missell energy to businesses, after being granted powers by Government.

Under the Business Protection from Misleading Marketing Regulations (BPMMR), Ofgem now has powers to clamp down on brokers and other organisations that are marketing energy products or services to business customers in a misleading way.

Brokers play an important role in helping businesses to compare the market. However, the latest Ofgem research found that around one third of Britain’s smallest businesses have a negative view of energy brokers.

Energy brokers’ fees can be recovered in various ways, for example they can form part of the rate businesses are charged for their energy tariff. However, Ofgem’s survey also found that around one third of businesses who had been approached by brokers did not consider that the broker had been upfront about the costs of their services. Previous Ofgem research has also shown that businesses are concerned about cold calling, high-pressure sales tactics and the unprofessional behaviour of some brokers.

Philip Cullum, Consumer Partner, Ofgem, said:

“It’s crucial for our economy that Britain’s small businesses get a fair deal in the energy market. Getting help from a broker can assist in keeping bills down, but business consumers need to feel confident that they know – and get – what they’re paying their broker for. Brokers could now face investigation by Ofgem if they fail to treat their business customers fairly.

“We’re pleased that Government recognised the value in Ofgem getting these powers, which should give better protection and confidence to businesses. This important addition to Ofgem’s regulatory toolkit complements the major changes we are making to the energy retail market for business and domestic consumers alike. The powers mean that Ofgem can investigate misleading marketing to businesses in the energy sector.”

If appropriate, Ofgem can seek undertakings from brokers and other organisations to stop misleading marketing activity or apply to court for an injunction to ensure that they are complying with the legislation.

Ofgem has also brought in a new set of rules to further protect businesses in the energy market. Since August 26th our new standards of conduct have been in force requiring suppliers to treat small businesses fairly on billing, contract issues and switching. These rules are backed by our powers to levy fines if necessary.

Ofgem has also updated existing rules meaning that 160,000 extra businesses now benefit from protections which stop suppliers automatically rolling over fixed term contracts for more than one year.

So that Britain’s smallest businesses are much clearer on when they should shop around to check they are on the best deal, Ofgem is requiring suppliers to put the contract end date on each bill from the end of March 2014.

Ofgem has also been developing an industry-wide code of practice for brokers that market energy to businesses. This code will set out that brokers have to behave in a fair and transparent way to give businesses confidence when using their services. Ofgem will publish the code for consultation in December 2013.

According to the International Energy Agency, China is expected to build more clean-energy plants through 2035 than the U.S., EU and Japan combined. IEA said in its recent World Energy Outlook report that the share of energy sources which include biomass, hydropower, solar and wind in world electricity supply will rise above 30% in the mentioned period. Solar PV and wind technology will enhance clean-energy output by 45%, helping it account for almost half of the increase in worldwide power generation through 2035, the IEA adds.

Lindsay Wilson of the Energy Collective writes an interesting article on the cost of natural gas.

Lindsay is the founder of Shrink That Footprint, a resource that helps people understand and reduce their carbon emissions. He is also a member of the team at Maneas, a data driven corporate strategy group. With a background in economics he has previously worked as an analyst at Bloomberg New Energy Finance, and as a freelance consultant in energy strategy in the resources and government …

MISSION STATEMENT

We, Which and our supporters, are calling on George Osborne to stand up for the millions of people grappling with rising energy costs. He should use his Autumn Statement on 4 December to cut the Big Six suppliers down to size by separating energy generation from supply. We’ve even given him four ways to cut back government energy policies that could save £1.8bn on your bills.

Members of the public may rightly be worried about the price of energy in the UK and concerned about how they will pay bills this winter, but a new report has shown costs are actually lower than the average in Europe.

According to the latest data to be released by Europe’s Energy Portal, which is the European Union (EU) body that monitors prices across the region, the UK’s price per kilowatt of energy is below the continent’s average cost.